C.I.T.UDAIPUR vs. JITENDRA SINGH RATHORE

ITA/90/2007HC RajasthanRJHC01010837200710 January 2013Author: DINESH MAHESHWARI,ARUN BHANSALI6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal was meritless and the question of law should be answered against the Revenue. The Court relied on its previous decision in Commissioner of Income Tax Vs. Hissaria Bros. (2007 291 ITR 244 (Raj.)), which held that penalty proceedings for defaults under Sections 269SS and 269T are independent of assessment proceedings and not governed by Section 275(1)(a). Instead, Section 275(1)(c) applies. The Court clarified that the initiation of penalty proceedings is marked by the first show cause notice. In this case, the first show cause notice was issued by the AO on March 25, 2003, and served on March 27, 2003. Under Section 275(1)(c), the limitation period expires six months from the end of the month in which action for imposition of penalty is initiated. Therefore, the period expired on September 30, 2003. The order passed by the Joint Commissioner on May 28, 2004, was clearly hit by the bar of limitation. The CIT(A) and the Tribunal were correct in setting aside the penalty order. The period of limitation is reckoned from the date of the first show cause for initiation of penalty proceedings, not from the date of the show cause by the competent authority if it is a subsequent step.

What were the facts?

The Revenue, Commissioner of Income Tax, Udaipur, filed an appeal against the Income Tax Appellate Tribunal's order for assessment year 2001-02. The assessee, Shri Jitendra Singh Rathore, accepted cash loans exceeding Rs. 4,00,000/-, violating Section 269SS. The Assessing Officer initiated penalty proceedings under Section 271D on March 25, 2003, serving a show cause notice on March 27, 2003. The matter was referred to the Joint Commissioner of Income Tax, the competent authority, on March 22, 2004. The Joint Commissioner imposed a penalty of Rs. 4,00,000/- on May 28, 2004. The Commissioner of Income Tax (Appeals) allowed the assessee's appeal, holding the penalty barred by limitation under Section 275(1)(c). The Tribunal upheld this decision.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in deleting the penalty under Section 271D holding that the penalty was not imposed within the prescribed period under Section 275(1)(c) from the date of initiation by the AO, ignoring the legal provision that the authority competent to impose penalty under Section 271D was the Joint Commissioner and hence the period of limitation should be reckoned from the issue of the first show cause by the Joint Commissioner? Assessee's Contention: Not recorded as no one appeared for the respondent. Revenue's Contention: The penalty proceedings under Section 271D could not be considered barred by limitation because the competent authority was the Joint Commissioner, and the limitation period should be reckoned from the date of the first show cause notice issued by the Joint Commissioner. Since the Joint Commissioner issued the notice after the matter was referred to him on March 22, 2004, his order dated May 28, 2004, should not be considered time-barred.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 271D,Section 269SS,Section 275(1)(c),Section 275(1)(a)

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Cause title — parties, addresses and appearances
1 D.B. INCOME TAX APPEAL NO.90/2007 Commissioner of Income Tax, Udaipur Vs. Shri Jitendra Singh Rathore. IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR : J U D G M E N T : D.B. INCOME TAX APPEAL NO.90/2007 Commissioner of Income Tax, Udaipur Vs. Shri Jitendra Singh Rathore.

DATE OF JUDGMENT 10th January 2013. P R E S E N T HON'BLE MR. JUSTICE DINESH MAHESHWARI HON'BLE MR. JUSTICE ARUN BHANSALI Mr. K.K. Bissa, for the appellant.

None present for the respondent. ---- BY THE COURT: (PER HON'BLE BHANSALI, J.)

This appeal under Section 260-A of the Income Tax Act, 1961 ('the Act') has been preferred by the Revenue against the judgment dated 22.09.2006 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('the Tribunal') relating to the assessment year 2001-02. The appeal was admitted on the following question of law:- “Whether on the facts and in the circumstances of the case as well as in the law the learned Tribunal was justified in deleting the penalty under Section 271D holding that the penalty was not imposed within the prescribed period under Section 275(i)(c) from the date of initiation by the AO ignoring the legal provision that the aut

The order continues below.

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